Sports Market Report

Joe Orlando
-
June 3, 2008

It's an Auction World

In case you haven't noticed, our hobby has become dominated by auctions. There are auctions of all types, from the thousands of listings on eBay each day to the high-end catalogue auctions each season to everything in between. This competitive format creates excitement no matter what type of item is being offered. From $1 to $1,000,000, this is the preferred method of selling in the current market. Auctions are everywhere!

As the auctions have become so prevalent in our hobby, direct buying opportunities have continued to diminish. This is especially true when it comes to high-end material. More specifically, sports memorabilia. The opportunities to simply purchase a stellar autographed item or outstanding game-used bat, for example, have almost disappeared entirely.

This begs the question... are all these auctions a good thing?

Well, generally speaking, auctions are a good thing in my opinion. That being said, the lack of dealers who are willing to inventory product and the scarcity of buying opportunities are a very bad thing. If the hobby becomes too dependent on the auction format, it can result in collector frustration. There are two main reasons for this, lack of market support for the items that collectors buy and fewer chances to add items to their collection if they prefer a non-auction format.

First, more dealers should be willing to support the market they sell in. If everyone becomes a broker, the market will suffer. If you look at the coin market, which has been a very successful collectibles market, there seems to be a much better balance between auctions and private sales. In that market, dealers seem to be more than willing to buy items than compared to sports memorabilia dealers.

It gives collectors peace of mind when they know that dealers are willing to buy their items at a certain price point. Since auctions can be unpredictable in nature and may take weeks or even months to conclude from the point of consignment, collectors may be discouraged if this becomes their only option.

In addition, many hobbyists are constantly looking for items to complete their collections. It can be frustrating to have to wait until the next auction comes around and some collectors do not enjoy the format at all. These collectors are not thrilled about having to stay awake into the wee hours of the morning just to find out if they won a lot. Furthermore, many high-end auctions occur within weeks of one another, which may create an abundance of desired items in too short of a time period.

Now, let's put a positive spin on this issue. There does seem to be a real opportunity for dealers of high-end collectibles to take advantage of the market swing. There is so much competition between auctioneers that it has left a void, a lack of major competition, at the retail level. The bottom line is that most collectors like both options. Auctions can be a lot of fun but, sometimes, collectors just want to avoid the hoopla and simply buy something they want.

As long as there is a balance between auctions and direct sales, the market should continue to thrive.